Help please: XYZ stock declining, how to cash in with options?

Discussion in 'Trading' started by desin, Sep 15, 2008.

  1. desin

    desin

    I'm new to options trading and have been searching for information on how to trade options. I'm hoping I can get an answer here from someone more experienced than I.

    I expect that XYZ stock will decline in the next month. How do I use option trading to cash in on this opportunity?

    Below are my order options.
    ===============
    Order Type:
    Buy to Open
    Sell to Close
    Sell to Open
    Buy to Close

    Type:
    Call
    Put

    Price Type:
    Market
    Limit

    Strike:
    Price:
    Covered or Uncovered
    ================

    If XYZ is currently trading at $25/share, and I believe it will hit $5 ... what orders do I need to place here?

    Thanks!